Traditional Institutional Lender Sets Up

TRANSACTION OF THE WEEK!!!

$3,850,000 For "Coast to Coast" Cross-Collateralized Acquisition Financing for Self-Storage Properties (One Mid-Development and One Pre-Development): GSP/Rifkind created a solution for a borrower needing a quick close and the ability to understand this "story" transaction. The Properties: (1) San Diego Area: 54,000 s.f. lot, well located near I-5. Presently occupied by an existing impounded auto tow facility/parking lot with minimal improvements. Income In Place: Approx. $8,000/month (month-to-month basis). Current zoning allows for development of self-storage on the site. Our borrower plans to construct a facility of to be determined square footage (between 60,000-90,000 s.f. depending on entitlements) in a submarket presently underserved by this property type; (2) Upstate New York: Existing self-storage facility consisting of 5 buildings totaling 56,000 s.f. Construction is still ongoing with 279 units completed (90% occupancy) and scheduled to total 437 units at completion. A second phase with an additional 93 units is planned on an unimproved contiguous lot (also included in the acquisition). This market is also underserved with respect to self-storage. Challenges to Financing: (1) Both properties face varying degrees of entitlement risk (although both are approved for self-storage, the final allowable building size is still subject to approval); (2) Construction Risk: Construction financing has not yet been obtained; (3) GSP/R needed to understand two unique markets 3,000 miles apart; (4) Transaction had to close in quickly. Closing was accomplished within 10 business days from receipt of L.O.I. Terms: (1) Interest only; (2) partial recourse; (3) minimal lock-out, then open to prepay. (David Rifkind, David Ellis, Gary E. Mozer)

Use GSP/Rifkind's quick-close capability to create value in your transaction. For more information, contact David Rifkind (ext. 109, drifkind@gspartners.com) -or- David Ellis (ext. 216 dellis@gspartners.com)

HOT MONEY !!!

Traditional Institutional Lender Sets Up Opportunity Fund With Highly Competitive Pricing for (1) bridge loans; (2) 2nd mortgages, and (3) participating mezzanine debt. General Comments: (1) Typical closing in 30 days from start to finish, quotes within 2 days and approvals within 10 days of application; (2) internal appraisal; (3) value-added opportunities on all income producing property types (multi-family, office, industrial, retail, hotels, congregate care/nursing homes, mini-storage). 1st Mortgage Bridge Financing: Most suited for acquisitions where there is some repositioning and value added. (1) Non-recourse; (2) fixed rate @ 10.25% to 10.5%; (3) 85% to 90% of cost and 75% to 80% of value; (4) 12-24 months (will go to 36 months); (5) interest only; (6) 1-2 pts.; (7) open to prepayment at par at anytime; (8) sweet spot is $2MM-10MM (can go to $33MM); (9) no minimum DSCR, but for transactions with less than a 1.0x coverage will typically require a funded interest reserve or the posting of an acceptable letter of credit. Value Added 2nd Mortgages or Loans Secured by Ownership Interest: (1) Overall LTV to 85%; (2) interest only for 3 years (may go to 5 years); (3) 15% IRR inclusive of fees; (4) also excellent funding source to buyout partners. Land Loans: (1) Up to 60% LTV; (2) 12 months; (3) land that is substantially through the entitlement process.

Major CMBS Originator Stretches to 80% LTV/1.20 DCR on Most Property Types: These new parameters were previously reserved for multifamily but are now considered "in the box" underwriting for several stabilized property types, including: Mobile Home Parks, Anchored Retail, Shadow Anchored Retail (previously unheard of even during 1997-1998), Industrial, and Multi-Tenant Office. This first tier CMBS lender is now sizing using the 80%/1.20s criteria. With the recent drop in 10 year Treasuries and compression in Swap spreads, the implementation of these new guidelines, borrowers can expect a significant increase in loan proceeds on a wider spectrum of property types.

A Fin-Fax Welcome toScott Kramer Who Joined GSP in May!!

Scott began his career in Irvine, California with Wells Fargo/Norwest Mortgage as a residential loan officer and software trainer. He then went to work for the sales team at Systems Management Specialists, a computer outsourcing company in Santa Ana, California. Scott is currently assisting Mike Gottlieb in the GSP Orange County office and can be reached at (714) 546-3465 (Mailbox 2) -or- skramer@gspartners.com.